Over the howls of
penny aficionados, an Arizona congressman introduced a bill this week that would
eliminate pennies from daily business transactions.

"Pennies
have virtually no value," says Rep. Jim Kolbe, R-Ariz. His "Legal Tender Modernization
Act" would not kill the penny, but it would make the coin obsolete. Checks would
still be made to the exact amount. But the bill would require merchants to round
up or down to the nearest nickel on cash purchases.

Proponents
of the penny argue that rounding would create a de facto tax on the poor, who
conduct more transactions in cash. Americans for Common Cents, a non-profit group
representing mining and coin-manufacturing interests, says merchants would always
manage to round up, costing consumers $600 million year.

Mark
Weller, the group's executive director, says the bill also would hurt charities
that collect millions in donated pennies.

Previous attempts
to eliminate pennies died in Congress in 1990 and 1996. Weller and others say
polls consistently find that 60%-65% of Americans want to keep the penny.

But
Kolbe's bill likely would resonate with many Americans who believe the penny has
become a relic. The coins were eliminated at U.S. military bases in Europe in
1980 to cut the expense of transporting them. Officials say complaints stopped
after a few months.

Other nations, including France,
Spain and Britain, quit producing low-denomination coins in recent decades because
production costs kept going up while the coins' purchasing power went down.

Efforts
to eliminate pennies are usually over "seigniorage," which is the difference between
what it costs to make a coin and the coin's value.

Because
so many people hoard pennies rather than keep them in circulation, the mint had
to produce 14.3 billion of them last year. Each costs about eight-tenths of a
cent to produce. The mint made about $29 million on pennies in 2000, says spokesman
Matt Kilbourne.

However, Kolbe says that transporting
and distributing the coins pushes the cost of each penny to more than nine-tenths
of a cent.

His bill also would allow the federal Bureau
of Engraving and Printing to print currency and postage stamps for other nations.
So if the mint stops making pennies, it could reap a windfall, he says.

Kolbe's
critics contend that his goal is to free up production capacity to make more Sacagawea
dollar coins. Kolbe has said he would like to see that coin replace the $1 bill.

The
1-cent coin  the word "penny" comes from British slang for pence 
has been around since 1787. It retains a firm place in the nation's psyche and
in its lore: "A penny saved is a penny earned." A penny for your thoughts. Pennies
from heaven.

Kolbe's office wouldn't assess the bill's
chances for passing. "We know that we have a long process ahead of us," spokeswoman
Neena Moorjani said Wednesday. Gar Travis of the American Numismatic Association
believes the coin's demise is a way off yet. "Americans have a fondness for our
coinage," he says. "Whether a congressman makes a proposal or not, that doesn't
make it a law."